Category: Business

Bidders Ask Egypt to Adjust Terms of Auction

Photo: Tobacco Reporter archive
Several tobacco manufacturers have asked the Federation of Egyptian Industries to change the conditions of a manufacturing license auction issued by the Industrial Development Authority (IDA), reports Zawya.
According to the companies, the IDA conditions protect Eastern Co.’s market share by preventing the new company from producing cigarettes at the same price point as the monopoly’s mass-market Cleopatra brand, which accounts for 98 percent of Eastern’s revenues.
On March 21, the tobacco manufacturer announced that the IDA has invited companies to the tobacco industry through tendering a new cigarette production license.
Eastern could own 24 percent of the to-be-established company without paying its share in the cost of the license.
The monopoly reported a 14 percent year-on-year increase in its net profit in the second half of 2020, recording EGP2.54 billion ($161.52 million).
Eastern company’s product portfolio includes cigarettes, cigars, pipe tobacco and molasses tobacco as well as cigarette filter rods and homogenized tobacco.
March 30, 2021
KT&G Opens Office in Taiwan

Photo: Taco Tuinstra
KT&G opened an office in Taiwan as part of the company’s ambition to become the fourth-largest tobacco manufacturer by 2025, reports The Korea Times.
Taiwan has been one of KT&G’s key markets since 2002 when the company began exporting to the island and upgraded products sold there with premium quality brands.
In 2020, KT&G sold more than 771 million cigarettes in Taiwan, up more than 2,200 percent from 2002.
“We will set up a team to bolster marketing and sales activities while working on new brands that fulfill consumers’ needs,” said Kim Na-mi, KT&G Taiwan Corporation head.
According to Kim, the market in Taiwan offers great potential. She noted that the country’s consumer spending is quickly recovering due to a highly effective Covid-19 response and that the country’s GDP growth will be higher than previously forecast.
March 30, 2021
KT&G Seeks to Generate Half of its Sales Abroad
KT&G seeks to generate half of sales from abroad by 2025, according to the Yonhap News Agency.
Currently, KT&G earns 40 percent of its tobacco sales from exports.
The company operates sales subsidiaries in five countries—Russia, Indonesia, Turkey, Taiwan and the United States.
In 2020, its sales rose 6.8 percent to a record KRW5.3 trillion ($4.68 billion) from KRW4.96 trillion a year earlier, helped by strong demand for its products in Russia, the U.S. and the Middle East.
KT&G’s factories in South Korea, Russia, Turkey and Indonesia had a combined capacity of 13.6 billion cigarettes a year in 2020.
In addition to its mainstay tobacco business, KT&G owns Korea Ginseng Corp., which produces ginseng and cosmetics products.
March 24, 2021
Kaival Appoints New Board Members
Kaival Brands Innovations Group has appointed Paul Reuter, Carolyn Hanigan and Roger Brooks to its board of directors.
In addition to gaining the experience and judgment that the new members will bring to the board, their appointments are intended to ensure the company complies with certain corporate governance rules ahead of its planned Nasdaq uplisting.
“We are very pleased that Paul, Carolyn and Roger have agreed to join us as new members of the board,” said Niraj Patel, CEO of Kaival Brands, in a statement. “Coming off a remarkable year that demonstrated the strength of our team and products, these three individuals are joining the company at an exciting time. We look forward to benefiting from their diverse backgrounds and respective expertise.”
Reuter brings nearly five decades of industry experience in small box retail as a journalist, editorial director, entrepreneur and speaker. He has launched two businesses, including MidWest Retail Group, where he served as chairman and founding partner from April 2013 through June 2019. He is also the founder of Kreative Collaborations, an industry consultancy.
Prior to her retirement, Hanigan was the president of Reynolds American Innovation Co., an operating company of Reynolds American Inc. (RAI). Hanigan led the global vapor collaboration with British American Tobacco (BAT) up until RAI was acquired by BAT in 2017.
Coming off a remarkable year that demonstrated the strength of our team and products, these three individuals are joining the company at an exciting time.
Niraj Patel, CEO, Kaival Brands
She was the architect of RAI’s U.S. reduced-risk products strategic direction to further the vision of transforming tobacco. Under her leadership, RAI prepared both the U.S. commercial execution and regulatory applications for the Glo tobacco-heating products, the Velo nicotine pouches, and the Alto, Ciro, Vibe and Solo nicotine vaporizers.
Brooks is currently the chairman, treasurer and co-founder of Abierto Networks. Prior to his roles at Abierto Networks, from 1998 to 2008, Brooks was the lead independent director and member of the compensation and audit committees for Moldflow Corp. From 2017 to 2019, Brooks served as an independent director of Lytron Incorporated.
Kaival Brands recently reached $100 million in revenues.
March 22, 2021
NATO Celebrates 20th Anniversary
The U.S. National Association of Tobacco Outlets (NATO) is celebrating its 20th anniversary this month, reports CStore Decisions. The organization was founded in 2001 to fill a need for a national association that served tobacco outlet stores but has expanded to include every category of retail store that sells tobacco products.
NATO’s mission is to improve business conditions for retailers that sell tobacco in the U.S. while providing information to members on federal, state and local regulations and laws that pertain to the sale, advertising, promotion, regulation and taxation of tobacco products.

For convenience stores, there is a need for up-to-date information on local, state and federal legislation as well as FDA regulations. NATO has a special expertise on each of these levels of government, which is beneficial to the convenience store segment.
Thomas Briant, executive director, NATO
The association also offers retailers information on how best to comply with various regulations and laws as well as how to respond to proposed regulations. NATO’s membership comprises more than 62,000 retail stores (tobacco stores, convenience stores, service stations, grocery stores, liquor stores and corner retail markets).
NATO counts nearly 30 manufacturers from every segment of the tobacco industry and numerous wholesalers among its members. “For convenience stores, there is a need for up-to-date information on local, state and federal legislation as well as FDA regulations,” said Thomas Briant, executive director of NATO. “NATO has a special expertise on each of these levels of government, which is beneficial to the convenience store segment.”
March 19, 2021
Egypt Asked to Broaden Manufacturing Bid

Photo: Taco Tuinstra
Nakhla Tobacco Co., Imperial Tobacco, British American Tobacco and Al-Mansour International Co. have asked Egypt to broaden the conditions of a prospective license to manufacture cigarettes in the country, reports Reuters.
Egypt has invited tobacco companies to bid for a license to manufacture cigarettes in the country, which has been dominated for decades by the Eastern Co. state monopoly. The winning bid must include a plan to begin production within three years and at a rate of at least 15 billion cigarettes per year.
The companies that were invited to bid said the license’s conditions were too narrow and asked the prime minister to halt the bid round until they could be made fairer.
The bid deadline has been set for April 4, with the auction to be held on June 6.
The cigarette industry contributes more than EGP60 billion Egyptian ($3.8 billion) to government coffers yearly, according to the state Industrial Development Authority.

March 19, 2021
Swisher and EAS Expand Partnership

Photo: EAS
Swisher and E-Alternative Solutions (EAS) have expanded their partnership to support the marketing, sales and distribution of EAS’s Leap and Leap Go vapor brands. Both companies will remain separate entities with EAS benefitting from the additional support and strength of Swisher’s world-class sales and marketing organization.
Jeffrey Brown, formerly vice president of sales for EAS, has been named general manager of EAS and will take the lead in the evolution of the partnership.
“Jeff is a well-respected leader with more than three decades of industry experience, and as general manager, he is the natural choice to take the EAS business to the next level and drive our respective brand expansion goals,” said John Miller, president and CEO of Swisher, in a statement. “In the short term, the expanded partnership between EAS and Swisher will remain transparent to our valued customer base, and we will be following up with additional details as they become available.”

I look forward to working with the Swisher sales and marketing teams and taking the Leap and Leap Go brands to the next level.
Jeffrey Brown, general manager, EAS
“I couldn’t be more excited about this arrangement and look forward to working with the Swisher sales and marketing teams and taking the Leap and Leap Go brands to the next level,” said Brown. “EAS was built from the ground up to prosper in the highly regulated tobacco environment, and with the bench strength of the Swisher sales and marketing teams, we have the power to broaden our reach and expand the distribution of these great brands,” he added.
Over the past several years, Swisher has continued to expand its offerings to include smokeless tobacco products, premium cigars and modern oral nicotine products to appeal to diverse and changing consumer tastes. Broadening its strategic partnership with EAS is another step toward becoming a more consumer-centric company.
March 19, 2021
White Cloud Ends Online Sales Due to Mail Ban

Photo: White Cloud Electronic Cigarettes
White Cloud Electronic Cigarettes, a stalwart in the vaping industry, will end all online sales for U.S. customers after the U.S. Postal Service stops shipping e-cigarettes on March 26. In a post on its Facebook page, the vapor company said that it will continue to fill international orders and will post a list of retail stores that will still carry White Cloud products in the U.S.
“This was not a decision we wanted to make, especially after putting so much effort into submitting our PMTAs to the FDA and ensuring our products never reached the hands of minors,” the company wrote on Facebook. “But, after spending the last couple of months searching for a solution to the vape mail ban, we’ve reached the end of all possible options, and there is simply nothing we can do to continue shipping domestically.
This was not a decision we wanted to make, especially after putting so much effort into submitting our PMTAs to the FDA.
White Cloud Electronic Cigarettes
White Cloud asked vapor industry advocates to send a message to Congress and support the Consumer Advocates for Smoke-free Alternatives Association (CASAA) in its efforts to protect consumers’ right to access reduced harm alternatives. CASAA has organized a campaign to fight the U.S. mail ban.
White Cloud is not the first vapor company to suffer from the shipping ban. In March, Logic said it would end online sales of its e-cigarettes to U.S. customers. Securience announced a merger with VapinDirect to better cope with the shipping restrictions. Lizard Juice e-liquids also said it would stop mailing products to consumers.
March 11, 2021
BAT Announces Investment in Greece

Photo: BAT
British American Tobacco (BAT) will invest €30 million ($35.72 million) and create 200 new jobs in Greece, reports The National Herald, citing a company announcement. The investment will reportedly focus on BAT’s Glo Hyper tobacco-heating product.
BAT has paid €3.2 billion in taxes and social insurance contributions in recent years, supporting around 30,000 workers in its retail and distribution network and 10,000 workers in tobacco production.
BAT invests heavily in research and the development of new alternative smoking products. Globally, more than 1,500 scientists and specialists work at its R&D centers.
Originally launched in Japan, Glo Hyper came to Greece in 2018.
March 10, 2021
Securience and VapinDirect Merge

Photo: Alexas Fotos
Securience is merging with VapinDirect, an online vaping wholesaler. The parent to the DuraSmoke, Forge, AmericaneLiquidStore, and VapeMoar brands will officially become a part of VapinDirect beginning March 31, 2021, according to an email to its customers.
Last month, Securience announced it would be shuttering its business. In a letter to its partners, the company attributed its decision to a recent amendment of the Prevent All Cigarette Trafficking (PACT) Act outlawing the shipping of vapor products through the U.S. Postal Service (USPS).
“A top priority of ours has always been to ensure guidelines and legal rules are held to the utmost standards,” the company wrote in its most recent message. “PACT Act raises these standards, and we want to ensure all our customers that they will be maintained. This merger will allow us to continue to distribute products business to business.”
Based in Green Bay, Wisconsin, USA, VapinDirect will take over Securience’s manufacturing capabilities in Wauwatosa, Wisconsin. VapinDirect will also be adding thousands of products to Securience’s existing catalog.
“VapinDirect is larger and thus more financially stable, having about [five times] our employment level, and thus better able to manage growth and change in the industry,” Securience wrote. “Our existing employees will be added to their team and will continue to use the same ISO-certified processes and equipment in the same Wauwatosa location.”
The company will be contacting its wholesale customers over the coming weeks to introduce VapinDirect and clarify its shipping procedures. “There are many other challenges within the industry concerning PACT and this merger is one of the many ways we will continue to find a way,” the email states.
March 9, 2021